A registration statement for a new exchange-traded fund (ETF) that will invest in bitcoin futures among other traditional investments has been filed with the U.S. Securities and Exchange Commission (SEC). The fund’s portfolio will include bitcoin futures traded on the Cboe Futures Exchange and the Chicago Mercantile Exchange as well as sovereign debts and money market mutual funds.
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New ETF Filing
Reality Shares ETF Trust filed a registration statement with the U.S. Securities and Exchange Commission on Monday for an ETF that will invest in bitcoin futures as part of its investment strategies. The Reality Shares Blockforce Global Currency Strategy ETF will be an actively managed fund listed on the NYSE Arca exchange. The fund is “designed to provide investment exposure to global currencies, both fiat and virtual currencies,” its filing reads.
The new proposed ETF will invest in a portfolio comprised of “high-quality, short-term (no greater than 18-month maturity), sovereign debt instruments” listed for trading on U.S. exchanges in U.S. dollars, euros, British pounds, Japanese yen, and Swiss francs. According to the filing, it will also invest in “bitcoin futures contracts of various maturities listed for trading on U.S. exchanges that provide exposure to the price movements of bitcoin” as well as “money market mutual funds and/or other cash equivalents.”
Investing in Bitcoin Futures
The registration statement for the Reality Shares Blockforce Global Currency Strategy ETF details:
The fund plans to invest in the bitcoin futures traded on the Cboe Futures Exchange Llc … and/or the Chicago Mercantile Exchange (CME) but may invest in bitcoin futures traded on other exchanges in the future.
In addition, the fund expects to obtain exposure to bitcoin futures by investing up to 25 percent of its total assets in a wholly owned and controlled Cayman Islands subsidiary. The filing explains that the investment adviser to the fund “will seek to limit the subsidiary’s investment in bitcoin futures so the fund’s aggregate notional exposure to bitcoin futures is limited to 15% of the fund’s net assets at the time of investment.” Furthermore, the fund may also invest in bitcoin futures directly to a limited extent.
Existing Blockchain ETFs
Reality Shares already offers two blockchain ETFs created in partnership with Nasdaq: The Reality Shares Nasdaq Nexgen Economy ETF (BLCN) and the Reality Shares Nasdaq Blockchain China Index (BCNA).
The former was incepted on Jan. 17 last year and seeks long-term growth by tracking the investment returns of the Reality Shares Nasdaq Blockchain Economy Index. The latter was incepted on June 20 last year and seeks long-term growth by tracking the investment returns of the Reality Shares Nasdaq Blockchain China Index comprised of blockchain-related companies located in Hong Kong and mainland China.
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